Providence, RI · Member since 2017 · 23 posts · 8 votes
Hi BP community,
I am in the midst of buying a 3 family property, the list price is $440. My initial offer on the house was at $420k, which was beat by an above list offer. Lucky for me, the offer from the other party fell through, and I am now the only party involved in this discussion with the seller.
After waiting almost a week, my buying agent tells me that seller came back with a final offer of $435k. No option to counter. Is that acceptable for them to do?? I had less than 24 hours to accept, and I did not see a formal counter in writing. Is this common??
Yeah they threw a verbal offer. Then can do that if they want. Personally I like my stuff in writing then after we have something going on a mutual respectful discussion then we can verbal a bit to hammer out the details and write up a final that is all complete.
As far as a week later giving a final verbal after telling you "no, go home", because theirs fell through..... it's all a matter of style. It sounds like you were not given the respect you feel that your offer deserves which may be a viable feeling. However it is business, do you still like it at 435? Do you like it at 427K? If you want to make another offer they can't tell you what it is (They can ignore it if they choose but ignoring offers coming in at 95% of list is bad business), they only control what they put on paper. You can resubmit your original offer with a new date.
Good Luck and keep emotions out of it and you got this!
Investor · Columbus, OH · Member since 2017 · 31 posts · 27 votes
9y
In this market...its very common. Once you agree to the price, I'm assuming you will get something in writing. It doesn't mean you can't informally counter offer his $435k!
Yeah they threw a verbal offer. Then can do that if they want. Personally I like my stuff in writing then after we have something going on a mutual respectful discussion then we can verbal a bit to hammer out the details and write up a final that is all complete.
As far as a week later giving a final verbal after telling you "no, go home", because theirs fell through..... it's all a matter of style. It sounds like you were not given the respect you feel that your offer deserves which may be a viable feeling. However it is business, do you still like it at 435? Do you like it at 427K? If you want to make another offer they can't tell you what it is (They can ignore it if they choose but ignoring offers coming in at 95% of list is bad business), they only control what they put on paper. You can resubmit your original offer with a new date.
Good Luck and keep emotions out of it and you got this!
Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
9y
I have been a seller who has stated this is the lowest I will go. One time I ended up going lower by $5000 because I had to sell the house. The other times, I went no lower. It's business and not personal. However you can offer a different amount, and see if it sticks.
Providence, RI · Member since 2017 · 23 posts · 8 votes
9y
Hi all,
Thank you for the responses!! It's amazing to be able to get instant feedback on something that's been bugging me for days. I am actually asking the question now after agreeing. The way the situation was presented to me, was take the $435k offer, or selling agent will allow the 7 other interested parties to view the house and allow for other bids. The first 2 offers including mine was made after 2 days of the house on market. I panicked of sorts, and went ahead and signed the P&S at $435k.
The strategy my buying agent said was, accept the $435k purchase price, and we will get some money/value back at the inspection. Inspection took place last Saturday. Below is my request.
From inspection report, in order of safety,
1. Electrical breakers
2. Roof
3. Railings
4. First floor bathroom broken tiling, wall water damage, baseboard heating broken
5. Retaining wall
6. Vacuum breakers on 2 units
7. Driveway
8. Water damage throughout house noted in report.
Asking for $15k price reduction, see high cost items quoted total $14.5k, asking another $500 for all minor repairs.
About 2 hours ago, my agent emailed me, seller offered fixing electrical breakers and $3k for the roof.
This is way lower than I'm expecting, working with my agent to ask for a better deal, but his response is basically seller knows he has hot commodity...
What's the best way to get the most out of this situation?!
Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
9y
Here is my take.
Is yours a seller or buyers market?
Just because he may have seven more people interested, does not mean seven people will make offers. Doesn't mean one will make an offer. The seller is playing a tactic. With that said, again I have been a seller with a very confident situation and had my buyers walked I wouldn't have thought twice about it. It sure seems like the seller is confident in their property and in the end you need to determine what you want to do. They will not give you $15,000... you may only get the breaker and $3000 back. Does the deal on your end fall apart at that cost? If it does, walk. If it is still a deal, and you feel they aren't bluffing, take it.
Just keep in mind at this stage, if you come back and say "give me $10,000 back", the seller could cancel the contract and you are stuck. How much do you want the house?
Providence, RI · Member since 2017 · 23 posts · 8 votes
9y
@Brian Pulaski Thanks again for your input. Very much appreciate your voice of reason. It's a seller's market, and this property is walking distance to Brown University. My buying agent keeps telling me the property will surely appreciate rapidly over the next few years, but I don't want to count on that to decide on the deal.
Since the potential to appreciate, and the potential to raise rent are both assumptions, it's really tough for me to draw the line when the property is no longer worth it...
I do want to house, but I am also feeling like I'm losing out a lot here, and that my agent should be fighting harder for me. He's getting a hefty commission out of this too, shouldn't he be able to get me a little better than $3k only?
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
9y
I am not a fan of the go back after inspection unless it is unseen issues. In this case the client (you) now has money involved and something to lose. If the original offer was all in good faith this would not be a problem. Instead the offer was made with the plan of going back to the original price offer after acceptance.
Someone is always going to feel they got the short end of the stick. I cant speak to the value as I dont personally know if it is worth 50 bucks or 2 million. Your best bet is to run the numbers and find your end number, make a line in the sand and be ready to possibly lose the inspection costs.
Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
9y
@Jennifer Cheu you are in a hard spot. As much as you want your realtor to "fight" he might be thinking the fight might lose you the house. The seller sounds like they know the house they have and it will sell. Puts you in the spot you are. If you go back for more, you will most likely lose the deal. Sadly it is 10% on you and not this house to make that call.
Providence, RI · Member since 2017 · 23 posts · 8 votes
9y
@Brian Pulaski I think you are absolutely right, and my realtor is afraid to tell me what you're saying face to face. He assured me that I can always counter, if the seller doesn't budge, have the option to take the $3k offered. So, I countered at $12k and we'll see what the seller does.
@Joseph Young Right now I have $2000 in escrow, which I believe I would get back if no agreement could be reached. The inspection was $645 plus $170 for lead inspection which didn't pass and was a waste in my opinion...
Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
9y
@Jennifer Cheu I would be very cautious about what your realtor said. In my experience if you came back at $12,000, you have put the ball in his court. If he says, no the deal is done. You can't just say... "ok I'll take the $3,000". You not accepting the $3,000 and countering means you have backed out of his offer. Maybe my understanding is incorrect, but everything I have ever heard or been told is that once you counter back, you can't just say, forget it and take their last offer. The seller hasn't to allow you to do that.
I also believe you would get your money back, earnest money, not any money back for inspections.
Do you trust your realtor? I would rather my realtor be blunt and honest with me, then skirt around things and potentially risk my deal.
Providence, RI · Member since 2017 · 23 posts · 8 votes
9y
@Brian Pulaski I completely agree with you, and wanted to fully understand my risk before countering. In email, my realtor responded, "if you counter, and he doesn't accept, the original counter stays in place of 3 K, he can't go back, or lower, or withdrawal" I'm trusting his word on this.. despite what I'm hearing in responses in this forum.
"if you counter, and he doesn't accept, the original counter stays in place of 3 K, he can't go back, or lower, or withdrawal"
Not speaking for Rhode Island and things could be way different (Although I doubt it). You put it on paper as a counter he always has 4 choices to any offer/counter offer. Accept/Decline/Counter/Ignore. They are the same choices you have to a counter or offer. When yours went to him he had 4 choices, he chose counter. Then it came to you (there is a Life of offer timer that if nothing happens the ignore is assumed and the deal dies), where you have 4 choices. You are countering with 12K, he will have 4 choices. This goes back and forth until Accept/Decline or Ignore happens. The I counter but if not I'll take yours option is a risk in itself.
Anytime you go back to the table you risk losing the deal because you put the ball back in their court. Not to say you never should, just that you should be aware it can happen.
Real Estate Agent · Jacksonville, FL · Member since 2015 · 102 posts · 65 votes
9y
A counter offer is an express rejection the current offer ($3k) constituting a new offer ($12k). If the seller rejects the counter he is in no way bound by the original offer, which no longer stands. Sounds like your agent is playing a risky game and if I were the sellers agent, I would be inclined to tell you to pound sand just on general principle.
Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes
9y
You seem like a nickel and dimer who is trying to extract every last penny from the deal. While this is your right, you need to understand this is a residential seller, not commercial or wholesale. As a seller who just listed I would have already advised my agent to get rid of you.
Westerville, OH · Member since 2017 · 1 post · 2 votes
9y
Just wanted to reinforce what others have said about not being able to go back to the previous offer; you could, but the seller would most likely have to counter back with the same offer again. I am not a lawyer and it could be different in Rhode Island, but I spent a semester studying contract law for a Civil Engineering degree and I believe this was also part of the real estate licensing courses. Once you submit a counter offer all previous offers are void.
"A counter offer is an offer made by an offeree in return for an original offer during negotiations for a final contract. It is a fresh offer made in reply to an initial offer. A counter offer is made by rejecting a prior offer and it automatically discards the earlier offer, rendering it void. A counter offer initiates another contract and requires acceptance under the terms of the counter offer. If not, there is no valid contract."
Providence, RI · Member since 2017 · 23 posts · 8 votes
9y
@Steve B. Thank you for the perspective, I can see how the seller could feel that way. However, this is the first time for this property I have pushed back and counter offered. Hopefully it doesn't come off as nickel and diming. Would hate to miss a few thousand dollars just for not wanting to stir the pot.
I will let everything know as things progress. My agent tells me the back and forth will be verbal until we reach an agreement, my feel is that seller won't just pull the deal on the first time I push back. Let's hope.. It's great to have this discussion rather than stressing out over it on my own!!
Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
9y
@Jennifer Cheu from the sellers eyes, this is not the first time you pushed back. You made a lower offer on the initial sale, in his eyes this is you pushing back from his listing price. Your second pushing back was to ask for $15,000 after inspections (getting your $435K, down to your initial $420K, he saw this and to him it was you pushing back). He sent you what he would agree to, and you pushed back a third time for $12,000... So what you see as pushing back once... the seller is probably unhappy and sees you pushing back multiple times. If he truly has a hot property with 7 other people waiting... I actually think he might walk from your deal.
Realtor · Smyrna, TN 37167 · Member since 2013 · 248 posts · 147 votes
9y
Originally posted by :
My agent tells me the back and forth will be verbal until we reach an agreement, my feel is that seller won't just pull the deal on the first time I push back. Let's hope..
This is why the agent said that the seller's $3000 offer will stand, because your "counter" is only an oral offer and hasn't been put in writing. Once any of this is put in writing, then it's an actual counter offer. At the moment, it's just talk. At the point where either party receives a written offer (a counter-offer is just a new offer) the choices, as @Mike Cumbie explained, are to accept/reject/counter/ignore.
As for your concerns about losing your earnest money, that should have been addressed in the contract. Ask your Realtor for some clarification on whether or not you are within your inspection period. In fact, it sounds like you two could benefit from a conversation to make sure you're both on the same page. I'm in agreement with @Brian Pulaski's comment above that it's better to have straight talk between Realtor and client than to have uncertainty and ambiguity because someone is afraid of having to explain something uncomfortable and risk losing a deal.
Residential Real Estate Broker · Chicago Suburbs, IL · Member since 2013 · 1k+ posts · 594 votes
9y
Do you have a attorney you plan to use for the closing? I would be asking that lawyer how offers and counters work, technically that's legal advice which should not come from an agent. I have run across to many agents who are clueless with how the contract works.
Investor · Moorpark, CA · Member since 2016 · 248 posts · 191 votes
9y
@Jennifer Cheu In my experience, a verbal offer is a nonexistent offer, and operating otherwise is unprofessional and unwise. Also for your consideration, you originally offered $420,000, which is $15,000 less than what you're currently under contract at. So your attempt to ask the seller for $15,000 comes off as a thinly-veiled and obnoxious attempt to get back to your original offer amount.
To me, it would communicate that you never had any intent to actually be under contract at $435,000, which demonstrates bad faith and unfair dealings (which in CA is a breach of contract,) and I'd be kicking you to the curb and trying to keep every dollar of your EMD that I could. I'd also be blacklisting your agent for suggesting to a client that such a thing was a good or fair way of conducting business.
None of this is directed at you, by the way, I simply have sharp feelings about the advice you may be being given, which of course is only based upon my own practice in my own market.
@Kimberly H. Real estate agents are recognized as quasi-attorneys with legal real estate expertise of an extremely narrow scope. Discussing how offers and counter offers work completely falls within that scope and 100% should absolutely be explained to every single client an agent works with. Not only is it good business, it's just the right thing to do.
Rental Property Investor · Manassas, VA · Member since 2015 · 68 posts · 49 votes
9y
Through all of this I have seen nothing about whether or not the $$$ still support your investment criteria. If they do, and you can get past the fact that you have to pay a few more percent than your initial offer, then go buy the place.
If the numbers don't work, then walk away.
Seems to me your getting wrapped up in the offer, and not the investment. The only correct answer is the one that fits your investment criteria.